Why you may (or may not) need to hire a new CFO / Accountant

A blog entry based upon The AV Profession podcast with Tim Albright and guest David McNutt from Navigate Management Consulting

When we go into an organization to conduct an assessment, more times than not I end up saying, ‘You might need a new Accountant.’  Now I’m not necessarily talking about replacing someone, but I am talking about a fresh new look at how you think about and go about conducting the accounting in your business.

Most accounting departments at systems integrators are taxed just keeping up with the day to day financial transactions of the business. Calculating project invoices and getting them out the door, managing deferred revenue on service contracts, matching up vendor invoices across project PO’s, etc.  All of this activity is facing and looking backwards. This is the information that is reported back to the management team, often after nothing can be done to change the financial outcome of a transaction. Not ideal for running a growing business.

What is necessary if you are serious about growing your business is looking at the most current and ideally, trending financial information. This is a transitions from Financial to Operational or Managerial Accounting practices.  You need someone leading that department that has the perspective of operations and a vision for where the company is going; not just the debits and credits of the transactions. The numbers take on a whole new meaning when they are analyzed against where you are going in the future.

Not all accounting packages allow you to look forward. Having a system that combines both your accounting and your operational information is the ultimate goal.

In most systems integration businesses, the second biggest inefficiency aside from poor labor productivity in projects, is accounting inefficiency. The time and effort put into gathering and making sense of the information in your business operations is onerous. It is not uncommon to have a senior manager or VP spend multiple days per week formulating and updating spreadsheets, in an effort to get valid information in a timely manner to the rest of the management team.

The ultimate fix for this waste of time and effort is to find a software package that does this for you. David McNutt of Navigate Management Consulting says that

Solutions360 is the most efficient and complete software package for the industry. It is designed specifically for the technology industry and they have out-of-the-box things that we propose to companies in our consulting practice. It is the first place we go to look for a fit for our clients needing the software piece of the puzzle. An ERP system like the one Solutions360 offers has every single piece of data in once place at your fingertips. All your costs are in one place, entered once, and accessible by anyone needing that information, which makes it much easier to make informed decisions. That is the beauty of a piece of software like this.